Tell us who owns you, says India to China network firms

[Mogambo]

Tell us who owns you, says India to China network firms

17 May 2010 Daniel Shane
Government won't lift ban on Chinese networking gear until vendors disclose ownership, as source links them to People's Liberation Army

The Indian government has demanded that Chinese networking firms Huawei and ZTE produce details of their ownership within one month if they are to lift the current ban on importing their equipment, the Wall Street Journal reports.

Earlier this month, authorities imposed an effective embargo on local telecommunications operators importing Chinese-made technology on grounds of national security.

Following a meeting between representatives from ZTE and the Indian Home Secretary late last week, the vendors have reportedly been issued with a deadline for disclosing the precise nature of their ownership.

At present, the Department of Telecommunications itself is not forbidding the import of Chinese gear, but all individual procurement requests are routinely being blocked by India's Ministry of Home Affairs, with one unnamed official claiming the government has uncovered alarming information regarding the ownership of ZTE and Huawei.

"We have evidence that the two companies are owned by the PLA (People's Liberation Army) of China, and India's security concerns are well-founded," the anonymous source told Dow Jones Newswires.

Shenzhen-based Huawei's founder Ren Zhengfei is a former officer of the PLA and it is this fact that is commonly cited as one of the main reasons why the company's attempted acquisition of US networking equipment vendor 3Com eventually collapsed.

Huawei neither confirmed nor denied the presence of a ban on its technology for use by Indian carriers. "We are not able to comment on any specific measures taken or contemplated," Ross Gan, global head of corporate communication, told the Wall Street Journal.

Last week, a separate company spokesperson told Reuters that Huawei was considering building an India-based manufacturing plant in a bid to allay its neighbour's security fears.

Security tensions between the two Asian giants remains an ongoing issue. In November 2009, Indian authorities reportedly told state-run telco Bharat Sanchar Nigam not to use Chinese equipment in politically sensitive regions, such as those areas bordering Pakistan, Bangladesh and Myanmar.

In April this year, Indian officials blamed attempted cybersecurity breaches targeted at the India Defense Ministry and the Dalai Lama's office on Chinese hackers.

India demands Chinese network firms reveal ownership details

 

[Mogambo]

China avoids condemning India over Huawei, ZTE ban

17 May 2010, 1701 hrs IST,REUTERS
BEIJING: China's commerce ministry said on Monday New Delhi should not discriminate against Chinese firms, but did not directly condemn a bar on Indian operators buying telecoms equipment from two Chinese companies.

India has banned mobile phone operators from placing orders with ZTE Corp and Huawei Technologies because of security concerns, industry sources say.

But Beijing, which has not shied away from criticising other countries, including the United States, over investment and trade restrictions, appears to be downplaying the ban.

Commerce Ministry Spokesman Yao Jian, when asked about the ban, said New Delhi should aim for a fair and transparent investment climate and emphasised the large stake Indian firms have in the Chinese market.

"We hope that (Indian) policies to be launched should be fair to all enterprises...and should not discriminate against Chinese enterprises," Yao told a regular news conference, in Beijing's most extensive comments on the issue so far.

"The investment by Indian firms in China is larger than Chinese firms' investment in India, and China has created a very good service and investment environment for foreign investment."

He also urged China's neighbour and rival to carry out any investigation according to international rules, rather than in a rushed fashion, but gave no further details.

Given the huge amount of business at stake, officials on both sides are likely to be keen to ensure the issue does not snowball, probably aiming to resolve it through dialogue, in the same manner other twitchy issues have been dealt with.

"We hope that the two countries can improve cooperation and negotiation to solve the problem," Yao said, and emphasised that Chinese companies have always "paid attention" to localisation -- manufacturing at least a portion of their products in foreign countries when they invest there.

The two firms blocked from what has become the world's fastest-growing mobile market said last week they may build factories in India as they scrambled to allay security fears.

India worries that Chinese telecoms network equipment can be used for spying or loaded with "malware". It also fears a rival could shut down telecoms service during a time of crisis.

A series of attacks on Indian government websites by suspected Chinese hackers has also hardened the authorities' position on importing potentially sensitive equipment from China.

Indian government ministers and officials have repeatedly denied any country-specific ban; it is mandatory for all Indian telecom carriers to seek security clearance from the telecom ministry before placing a purchase order, Chinese or otherwise.

China avoids condemning India over Huawei, ZTE ban-Telecom-News By Industry-News-The Economic Times

 

[jha]

Interesting developments...

 

[RobbieS]

Though I understand GoI's concerns given our history of mistrust with China, I can't help but feel that this is tied to Indian and MNC telecom lobby guarding their turf from competitive Chinese products. Both these companies are well known international names with assets and interests in various countries. It's naive to think that GoI can ensure transparency and avoid snooping by obtaining ownership information. It isn't hard to cover your trails and proxy-own a company today, so its confounding to see GoI asking for these details.

And to me the fact that Huawei is owned by an ex-PLA man hardly matters. We can't bar a company just because its owner once served in its country's army. Imagine what our reaction would have been, if Pak and China had banned Deccan Airways (if it was trying for flights to these countries) as it was founded and owned by Capt. Gopinath, an ex-IA guy!

Instead of banning these firms, it'd be better if we impose conditions around limited employment of expat Chinese and allowing govt. to unconditionally access their records and equipment at any time. While we talk of resolving mutual distrust and building confidence with our neighbor to the East; incidents like these don't help at all.

 

[gpit]

Tell us who owns you, says India to China network firms

17 May 2010 Daniel Shane
Government won't lift ban on Chinese networking gear until vendors disclose ownership, as source links them to People's Liberation Army

...

I don't understand why Indians are still doing business with China: the whole China is owned by commies according to their theory.

 

[applesauce]

^^ the thing with china is, that due to historically reasons it is very normal for companies to be own by former PLA officers even though the business is real and not a front and completely private.